BILL ANALYSIS Senate Research Center S.B. 2237 89R8420 DNC-D By: Bettencourt Local Government 3/28/2025 As Filed AUTHOR'S / SPONSOR'S STATEMENT OF INTENT Many public executive employee contracts include "golden parachutes"payout clauses that can result in substantial taxpayer-funded payments, even in cases of misconduct or poor performance. So public executive employees are receiving taxpayer-funded severance payouts worth hundreds of thousands of dollars. S.B. 2237 restricts political subdivisions from providing severance pay to executive employees beyond 20 weeks of compensation, prohibits severance pay entirely if the employee is terminated for misconduct, and requires severance agreements to be publicly posted for transparency. As proposed, S.B. 2237 amends current law relating to severance pay for certain political subdivision employees. RULEMAKING AUTHORITY This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 180, Local Government Code, by adding Section 180.011, as follows: Sec. 180.011. LIMITATION ON SEVERANCE PAY FOR EXECUTIVE EMPLOYEES. (a) Defines "misconduct" and "severance pay." (b) Provides that a person is an executive employee of a political subdivision for purposes of this section if the person is a chief executive officer of a political subdivision other than a school district, an agency or department head, or the superintendent of a school district or the chief executive officer of an open-enrollment charter school. (c) Requires a political subdivision that enters into an employment agreement, or renewal or renegotiation of an existing employment agreement, that contains a provision for severance pay with an executive employee to include a requirement that severance pay that is paid from tax revenue is prohibited from exceeding the amount of compensation, at the rate at the termination of employment, the executive employee would have been paid for 20 weeks, excluding paid time off or accrued vacation leave and a prohibition of the provision of severance pay when the executive employee is terminated for misconduct. (d) Requires a political subdivision to post each severance agreement in a prominent place on the political subdivision's Internet website. (e) Provides that this subsection applies to an action brought against a political subdivision by an executive employee of the political subdivision arising from the termination of the person's employment. Prohibits a court from issuing a writ of execution or mandamus in connection with a judgment in the action if the judgment does not comply with this section. SECTION 2. Makes application of this Act prospective. SECTION 3. Effective date: September 1, 2025.
BILL ANALYSIS
Senate Research Center S.B. 2237
89R8420 DNC-D By: Bettencourt
Local Government
3/28/2025
As Filed
Senate Research Center
S.B. 2237
89R8420 DNC-D
By: Bettencourt
Local Government
3/28/2025
As Filed
AUTHOR'S / SPONSOR'S STATEMENT OF INTENT
Many public executive employee contracts include "golden parachutes"payout clauses that can result in substantial taxpayer-funded payments, even in cases of misconduct or poor performance. So public executive employees are receiving taxpayer-funded severance payouts worth hundreds of thousands of dollars.
S.B. 2237 restricts political subdivisions from providing severance pay to executive employees beyond 20 weeks of compensation, prohibits severance pay entirely if the employee is terminated for misconduct, and requires severance agreements to be publicly posted for transparency.
As proposed, S.B. 2237 amends current law relating to severance pay for certain political subdivision employees.
RULEMAKING AUTHORITY
This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Chapter 180, Local Government Code, by adding Section 180.011, as follows:
Sec. 180.011. LIMITATION ON SEVERANCE PAY FOR EXECUTIVE EMPLOYEES. (a) Defines "misconduct" and "severance pay."
(b) Provides that a person is an executive employee of a political subdivision for purposes of this section if the person is a chief executive officer of a political subdivision other than a school district, an agency or department head, or the superintendent of a school district or the chief executive officer of an open-enrollment charter school.
(c) Requires a political subdivision that enters into an employment agreement, or renewal or renegotiation of an existing employment agreement, that contains a provision for severance pay with an executive employee to include a requirement that severance pay that is paid from tax revenue is prohibited from exceeding the amount of compensation, at the rate at the termination of employment, the executive employee would have been paid for 20 weeks, excluding paid time off or accrued vacation leave and a prohibition of the provision of severance pay when the executive employee is terminated for misconduct.
(d) Requires a political subdivision to post each severance agreement in a prominent place on the political subdivision's Internet website.
(e) Provides that this subsection applies to an action brought against a political subdivision by an executive employee of the political subdivision arising from the termination of the person's employment. Prohibits a court from issuing a writ of execution or mandamus in connection with a judgment in the action if the judgment does not comply with this section.
SECTION 2. Makes application of this Act prospective.
SECTION 3. Effective date: September 1, 2025.